COMMENT – Unleash farmers’ animal spirit to follow up on reforms

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Amid the economic damage from Covid-19, India has embarked on a series of reforms to rejuvenate its farms. But these measures now need to be backed up with policies to take them to the farmer’s doorstep. 

Under the Farmers’ Produce Trade and Commerce Ordinance 2020, farmers will now be able to sell their produce anywhere in the country, removing a regulation that restricted them to go to the nearest notified market. They would also have the right to sell to anyone in the country so long as they have a PAN card, dismantling another regulation that forced them to sell only to licenced traders that led to cartelization.

Moreover, farmers will also have the option to enter into agreements with buyers before even sowing their crop, a measure that will secure their earning regardless of uncertainties like the weather. They may enter into agreements that protect them from harvest losses. 

Another key piece of legislation has been the recent ordinance removing stock limits under the Essential Commodities Act that in the past stopped farmers and traders from building up stocks of goods like onions to prevent price rises. More often than not it hampered the marketability of their produce, skimming off their meagre earnings.

Farms need a tech revolution  

While these measures would go a long way in removing impediments that have tied down farming for decades, these alone won’t be a game changer yet for Indian agriculture. Dismantling archaic pieces of legislation will need to be backed up with comprehensive measures at the farm level, including a virtual information revolution.

The success of the recent reforms would critically depend on whether the farmer has access to real-time data on things like local weather, market trends such as prices of vegetables and from where he can best source inputs like fertilizers. Opaque layers of supply-dealer networks have typically benefited others like the middleman rather than the farmer.

Building up such transparency should not be difficult through the use of technology, but sadly while the world has recognised India’s information technology skills, they have largely bypassed the sector employing half of the country’s workforce.

Thankfully, there are rural pockets which have access to such technology, but it’s rarely integrated into the entire value chain that gives farmers the latest information showing how best to market their produce.  

With a myriad points of uncertainty that range from inclement weather to pest attacks, agriculture in India remains one of the riskiest businesses. The majority of farmers still depend upon the knowledge handed down to them over generations, effectively keeping them in the ranks of nations with low crop productivity.

Fragmented land holdings for a majority of farmers–due to draconian restrictions on transfers–have further obstructed  mechanisation and thereby access to capital.

Seeds of an economic rebound

Having taken the first few steps that are required, it’s time now more than ever to unleash the animal spirits of a farmer, so that he acts more like an entrepreneur. For a start, awareness centres should  be set up either by the government  or in collaboration with businesses so that the farmer has the latest information available at hand.

In a limited way, such centres already exist, thanks to agritech companies who have business contracts with either companies or Farm Produce Organizations who need the highest quality produce. These need to be scaled up to a national level with either government support or through more direct investments.

To its credit, the government has tacitly recognised the need. Among the recent policy measures, the government has  suggested formation of special farm clusters to capitalize on the uniqueness of a farm produce of a region like makhanas in Bihar with the aim of better marketability and raising value addition in agriculture.

But again the initial steps to market India’s produce would need to be backed up with other measures. Farmers rarely have knowledge of drawing up business contracts, but would need such guidance if their produce are to go out to global markets and earn them a decent livelihood. 

This can be easily remedied by conducting awareness programs at High Courts, District Courts and various other judicial forums where lawyers can volunteer their time for a nation-building effort to help achieve the government’s goal to double farmers’ income.

Indian industry too can support these efforts. The pandemic has put the Indian economy at an unusual crossroad, where every business house is bemoaning the lack of demand.

With expectations of a good monsoon, India Inc is pinning its hopes on rural consumption for a rebound. The question now is whether we can seize the moment to make a lasting difference or just be happy with the result of one good rainy season.

(Columnist Dr. Poornima Advani is a lawyer and is currently a Partner at The Law Point. She earlier served as Visiting Professor at the University of Mumbai and served Government of India as the Chairperson of National Commission for Women. She currently also serves as an Independent Director in a major sustainable energy corporation in India.)

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